2024 (2) TMI 24 - AT - Customs

Notification No. 46/2015-Cus effective from sale date, not notification date, duty liability reduced

CESTAT Ahmedabad ruled that Notification No. 46/2015-Cus dated 17.09.2015 became effective from 21.09.2015 when offered for sale, not from the ... Effective date of notification - Section 25(4) of the Customs Act - Publication and offer for sale requirement for notificationsEffective date of notification - Section 25(4) of the Customs Act - Publication and offer for sale requirement for notifications - Whether Notification No. 46/2015-Cus. took effect on 17.09.2015 (date of issue/publication) or on 21.09.2015 (date when it was offered for sale). - HELD THAT: - The Tribunal found as an undisputed factual position, evidenced by RTI information, that Notification No. 46/2015-Cus. though issued on 17.09.2015 was put on sale to the general public only on 21.09.2015. Applying the statutory mandate in Section 25(4), which contemplates that a notification shall come into force on the date of its issue for publication and shall also be published and offered for sale on that date, the Tribunal construed clause (b) to require all the specified events (issue/publication and offer for sale) for the notification to become effective. The Tribunal followed its earlier decision in Ruchi Soya Industries Ltd. Vs. Commissioner of Customs, Kandla , and relied on the line of authority (including the decisions discussed therein) holding that where the notification is offered for sale on a later date than its date of issue/publication, the later date is the effective date. Applying that principle to the present facts, the Tribunal held that the effective date of Notification No. 46/2015-Cus. is 21.09.2015, and therefore the increase of duty claimed by the revenue was not applicable to clearances where duty became payable prior to that effective date. The Tribunal set aside the impugned order and directed reassessment on the basis of the un-amended notification rate. [Paras 4, 5]Notification No. 46/2015-Cus. came into force on 21.09.2015 (date offered for sale); impugned order set aside and appeals allowed with consequential relief.Final Conclusion: The Tribunal held that, in view of Section 25(4) and the RTI evidence that the notification was offered for sale on 21.09.2015, Notification No. 46/2015-Cus. became effective on 21.09.2015 and not on 17.09.2015; accordingly the appellants were entitled to reassessment applying the un-amended rate and the appeals were allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether a notification issued under Section 25 of the Customs Act takes effect from the date of its issue/publication in the Official Gazette or from the date it is offered for sale by the Directorate of Publicity and Public Relations of the Board. 2. Whether an increase in duty provided by a notification that was issued before, but offered for sale after, the date of clearance/entry inward is applicable to bills of entry filed prior to the date on which the notification was offered for sale. ISSUE-WISE DETAILED ANALYSIS Issue 1: Effective date of notification under Section 25(4) of the Customs Act Legal framework: Section 25(4) provides that every notification shall, unless otherwise provided, (a) come into force on the date of its issue by the Central Government for publication in the Official Gazette; and (b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. Precedent treatment: The Tribunal relied on its earlier decision (appellant's own case) which analyzed this provision and distinguished earlier Supreme Court authority (Ganesh Das Bhojraj) as not addressing the amended Section 25(4). The Tribunal also referred approvingly to the decisions in Param Industries Ltd. and M.D. Overseas Ltd., which interpreted the amended provision to require all three events (issue, publication and offer for sale) as necessary for a notification to become effective; those High Court findings were subsequently upheld by the Supreme Court. Interpretation and reasoning: The Tribunal construed clause (b) of Section 25(4) to mean that the notification shall come into force only when it is issued, published in the Official Gazette and also offered for sale. The Tribunal treated the date of offer for sale as the operative effective date where there is a gap between issue/publication and offer-for-sale. The factual record (RTI response) established that the notification, though issued on 17.09.2015, was offered for sale on 21.09.2015; therefore, the notification came into force on 21.09.2015. Ratio vs. Obiter: Ratio - A notification under amended Section 25(4) becomes effective only when it is issued/published and offered for sale; the date of offer for sale is the effective date where it post-dates issue/publication. Obiter - observations distinguishing older Supreme Court authority (Ganesh Das Bhojraj) to the extent it did not consider the amended statutory provision. Conclusion: The effective date of the Notification is the date on which it was offered for sale (21.09.2015), not the date of issue/publication (17.09.2015). Issue 2: Applicability of duty increase to bills of entry filed before the notification came into effect Legal framework: Customs liability and rate applicability are determined by the law/notification in force on the relevant date - here, the date of entry inward or clearance as per the Customs Act and applicable notifications. Precedent treatment: The Tribunal applied its prior reasoning in the appellant's own case and relied on the chain of authority upholding the interpretation that the notification's operative date is the date of offer for sale, thereby affecting which notification governs particular transactions. Interpretation and reasoning: Since entry inward/clearance for the goods at issue occurred on 18.09.2015 (and bills of entry dated 12.09.2015 & 17.09.2015), and the impugned notification became effective on 21.09.2015, the increased duty under the later notification was not in force on the relevant dates. Consequently, the unamended earlier notification (providing a lower rate) was applicable to those bills of entry. Ratio vs. Obiter: Ratio - Where a notification increasing duty is offered for sale after the date of clearance/entry, that increased duty is not applicable to entries/clearances effected prior to the offer-for-sale date. Obiter - None significant beyond factual application. Conclusion: The increase of 5% duty under the later notification did not apply to the bills of entry filed/entries allowed before 21.09.2015; reassessment on the basis of the unamended notification at the lower rate is required. Remedial and procedural conclusion The impugned order imposing the higher duty was set aside, appeals were allowed, and the appellants are entitled to reassessment of bills of entry on the basis of the unamended notification rate (7.5%), with consequential relief.